Certified Government Financial Manager (CGFM) Practice Exam 2025 - Free CGFM Practice Questions and Study Guide

The Federal Financial Management Improvement Act of 1996 was designed to enhance the efficiency and accountability of federal financial management systems. A key goal is to improve the transparency and consistency of financial reporting across federal agencies. By establishing standards for financial management systems, the Act ensures that these systems produce reliable and timely financial information, which is crucial for decision-making and oversight.

The focus on transparency helps stakeholders, including taxpayers and government officials, have a clearer understanding of how federal funds are allocated and spent. Consistent financial reporting across agencies allows for better comparison and oversight, ultimately contributing to increased accountability in federal financial management. This is vital in building public trust in how federal finances are managed, ensuring that taxpayer dollars are used effectively and efficiently.

In contrast, while reduction of federal spending, training for federal financial managers, and compliance with international accounting standards are important aspects of financial management, they are not the primary objectives of the Federal Financial Management Improvement Act. The Act specifically emphasizes the need for improved financial reporting and accountability within federal agencies.